2022 (12) TMI 896 - AT - Companies Law

Tribunal restores company name in ROC register, orders compliance with timelines and punitive actions

M/s Sark Infraprojects Private Limited Versus Registrar of Companies, West Bengal

The Tribunal allowed the appeal, setting aside the NCLT's order and directing the restoration of the appellant company's name in the ROC register. The ... Seeking restoration of name of the company in the Register of Companies - it is alleged that the Company is not an active company and not carrying on any business for which it was incorporated - Section 252(3) of the Companies Act, 2013 - HELD THAT:- From the records, it is seen that the Appellant Company filed its statutory compliances as per law. Whilst the NCLT though in its order at para 3 observed that the Appellant Company enclosed/annexed with the Appeal the copies of the Annual Returns, Balance Sheet and Income Tax Returns for the Financial Years 2015-16, 2016-17 and 2017-18 and 2018-19. Despite sufficient evidence placed before it, the NCLT failed to consider the same on merits. Even though the law provides for striking off the name of the Company for non-complying the statutory requirement as stipulated under Section 248 Companies Act, 2013, the statute also provides Section 252 of the Act to prefer an Appeal to the Tribunal by the aggrieved person against such dissolution of the Company. The Appellant rightly exercised its jurisdiction under Section 252 of the Companies Act, 2013 before the NCLT. This Tribunal is of the opinion that the removal of the name of the company from the Register of Companies is not justified. There is no other ground except as mentioned in the notice dated 29.06.2018 for striking the name of the Appellant Company suo motu. The reasons for not restoring the company and dismissing the application of the Applicant is in our view not a sound ground - The ROC, West Bengal is hereby directed to restore the name of the Appellant Company to the Register of Companies, West Bengal subject to the compliances mentioned. Application allowed. Issues:Appeal against NCLT order for restoration of company name in ROC register.Detailed Analysis:1. Background: The appeal was filed under Section 421 of the Companies Act, 2013 against the NCLT order dated 25th November, 2019, which dismissed the application for restoration of the appellant company's name in the Register maintained by the ROC, West Bengal.2. Appellant's Submissions: The appellant company had filed an application under Section 252(3) of the Companies Act, 2013 for restoration of its name in the register. The company had faced issues due to delayed statutory compliances for the financial years 2015-16 and 2016-17. However, it had been operational and had filed necessary documents for subsequent financial years.3. NCLT Observations: The NCLT dismissed the application stating that there was no just reason to restore the name of the company as it was not active and had not been carrying on any business. The NCLT failed to consider the documents provided by the appellant regarding statutory compliances for the relevant financial years.4. Legal Analysis: The Tribunal analyzed the facts and observed that the only ground for striking off the company's name was its inactivity for two immediately preceding financial years. Despite the statutory requirement for striking off under Section 248, the appellant had the right to appeal under Section 252.5. Conclusion: The Tribunal found that the NCLT's decision to dismiss the application was not justified. It set aside the NCLT's order and directed the ROC, West Bengal to restore the name of the appellant company in the register. The appellant was required to pay costs, file pending returns, and comply with other necessary requirements within specified timelines.6. Directions: The Tribunal provided specific directions for the restoration process, including payment of costs, filing of returns, and compliance with statutory obligations. The ROC was also given liberty to take punitive steps for any non-compliance by the appellant company and its directors.7. Final Decision: The appeal was allowed, and the impugned order was set aside. The Tribunal directed the restoration of the appellant company's name in the ROC register subject to specified compliances and timelines. No costs were awarded, and the applications were disposed of accordingly.